Tessai is a blacksmith who has a shop in Kuskus. He has the dream of tempering a sword of legendary status, such as the Dragon King Sword or the Star Dragon Sword. By luck, Viktor brought the Star Dragon Sword to Tessai's forge--Tessai begged to join the Allied Forces so that he would have a chance to temper the Star Dragon Sword. - Blue Moon

Gameplay Information for Suikoden II

How to Recruit: Speak with him in the Weaponsmith Shop at Kuskus with Viktor in your active party.
Note: Tessai will be in the Weaponsmith Shop after liberating Greenhill.